Fed Expected to Adjourn Today With No Change in Rates; Eyes Turn to September

WASHINGTON–The Federal Reserve’s Open Market Committee (FOMC) is expected to adjourn its two-day meeting today by again not taking any action to reduce rates, although analysts believe such a move is getting clearer.

This week’s meetings mark the one-year anniversary of the Fed’s most recent interest rate hike, which pushed rates to their highest point in 23 years after a series of steady increases aimed at taming inflation.

The unlikelihood of any rate reduction at the July meetings has been signaled by Chairman Jay Powell, who has on numerous occasions said he wants to see additional evidence inflation has moved closer to the Fed’s target rate of 2%.

In addition, the Fed also wants to see a reduction in the rate of job growth, which has remained strong in 2024.

All Eyes on September

Analysts, including those inside credit unions, have said they believe the Fed could next reduce rates when it meets in September should trends around the growth of the rate of inflation continue. 

"The case to cut is already strong, and the Fed will likely use the July meeting to plant a seed that a cut in September is on the table," Ryan Sweet, chief U.S. economist at Oxford Economics, forecast in a research report cited by CBS News.

The View From Futures Market

While many expect just one rate reduction this year, CBS News noted the futures markets have priced in a 64% likelihood that the Fed will cut rates three times this year — in September, November and December.

The federal funds rate is currently at a range of 5.25% to 5.5%.